98. Relief in respect of Sri Lanka income tax

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

Where any person or any partnership, referred to in subsection (2), proves to the satisfaction of the

Commissioner-General that in respect of his or its income referred to in subsection (2), he or it has paid or is liable to pay for any year of assessment income tax in Sri Lanka and income tax for the corresponding period in any other country, then, such person shall be entitled to relief from income tax payable by him or it in Sri Lanka of an amount equal to the excess, if any, of the income tax in respect of such income payable by him or it in Sri Lanka (before granting any relief under this section), over the income tax in respect of such income, payable by him or it in such other country :

Where however such person or partnership is not liable to pay income tax in respect of such profits and income, for such corresponding period in such other country, such person or partnership shall be entitled to relief equal to the amount of income tax payable in Sri Lanka by such person or partnership in respect of such profits and income, for such year of assessment.

(2)

The provisions of subsection (1) shall apply—

(a)

(i)

to any non-resident person or any partnership registered outside Sri Lanka, being a person or partnership who or which provides in Sri Lanka, management consultancy services in areas specified by the Commissioner-General by notice published in the Gazette; or

(ii)

to any non-resident person or to any partnership registered outside Sri Lanka, who or which provides in Sri Lanka, architectural, engineering, quantity surveying or construction management services and such other services as may be ancillary thereto, to any resident company, being a company with which an agreement has been entered into by the Board of Investment under section 17 of the Board of Investment of Sri Lanka

Law, No. 4 of 1978, and which has in accordance with such agreement invested or agreed to invest in Sri Lanka within the period specified in such agreement, not less than fifty million United States Dollars or its equivalent in any other foreign currency, to meet the cost of–

(a)

any building purchased or constructed, and of any land, plant, machinery or furniture purchased; and

(b)

the acquisition of any asset not included in paragraph (a), for the use of the undertaking; or

(iii)

to any non-resident person or to any partnership registered outside Sri Lanka who or which provides in Sri Lanka, architectural, engineering, quantity surveying or construction management services and such other services as may be ancillary thereto, to any non-resident person or partnership referred to in sub-paragraph (ii);

(b)

in respect of the profits and income arising in or derived from Sri Lanka from the provision of any service referred to in sub-paragraph (ii) or subparagraph (iii) of paragraph (a), by any person or by any partnership referred to in those sub-paragraphs.

(3)

For the purposes of subsection (1), the income tax in

Sri Lanka or in any other country, payable by any person or by any partner of any partnership referred to in subsection (2), in respect of his profits and income referred to in subsection (2), shall be computed at the rate equivalent to the quotient obtained by dividing the income tax payable by such person or such partner (before granting any relief under this section)

in Sri Lanka, or in such other country, as the case may be, in respect of his taxable income ascertained for the purposes of income tax in Sri Lanka or in such other country, as the case may be, by his taxable income ascertained for the purposes of income tax in Sri Lanka, or in such other country, as the case may be.

K – MISCELLANEOUS

Read on from s 99